Shell anticipates record profits from its refining business in the third quarter, driven by global fuel shortages that have caused a significant rise in refined-product prices. The energy giant projects refining margins to reach approximately $42 per barrel from July to September, a substantial increase from $24 per barrel in the preceding quarter, and surpassing the previous high of about $28 per barrel seen during the early phases of the Russia-Ukraine conflict.
The improved profitability is attributed to the widening gap between crude oil costs and refined fuel prices. This comes amid disruptions in refinery operations in the Middle East and Russia, which have curtailed global fuel supplies, despite a decrease in crude oil prices. The global benchmark, Brent crude, averaged $85.60 per barrel in the third quarter, down from $97.05 in the previous quarter, though remaining above the $68.14 average from the same period last year.
Diesel prices have also experienced a sharp increase, with the premium over the global oil benchmark exceeding $100 a barrel for the first time. This surge has created particularly advantageous conditions for refineries in Europe and the United States.
In addition to refining successes, Shell expects a rise in gas production following its acquisition of Canada’s ARC Resources. The company forecasts production levels between 740,000 and 780,000 barrels of oil equivalent per day, which is an increase from earlier estimates of 570,000 to 630,000 barrels per day.
